Coronavirus Job Retention Scheme (CJRS)

David Morris

Director

25 March 20

What we know so far

• It will be backdated, if necessary, to apply from 1 March 2020 and will run for 3 months, but during its announcement the Chancellor stated that it can be extended for as long as deemed necessary. Backdating means the scheme will cover employees who have been laid off or made redundant since 1 March. The grant will only be available from the date workers are furloughed, this is not backdated.  
• CJRS applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’. Furlough means ‘granted a leave of absence’ and furloughed workers are not permitted to do any work for the employer. 
• The CJRS will pay a grant to employers for them to pay the salaries of furloughed workers. CJRS payments will be 80% of the salary, up to £2,500 per month an employee.  
• The employer can continue to pay their furloughed worker their full pay entitlement, ie top-up their pay for the remaining 20%. This is not a requirement. 
• All UK employers who need to furlough employees will qualify, there are no restrictions for size or sector. 
• Employees that were on the payroll on 29 February who are furloughed will be eligible. Eligible employees will be those for whom there is currently no work but who are nevertheless retained on the payroll at nil hours and who would otherwise have been made redundant. 
• Employees on zero hours contracts are expected to be included and pay may be based on an average monthly earnings calculation. Temporary Workers are expected to apply only for the length of the contract. 

What we know of the Process

You will need to: 

• Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. 
• Once a new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required). 

Other Important Issues 

• It is anticipated that the first payments will be made within few weeks, hopefully before the end of April. 
• Employers will need to operate their payroll as normal, including pay for furloughed employees and then submit records for a ‘refund’ for those employees who are furloughed. Employer’s NI and pension entitlements will continue to be payable as normal. 
• Similar to a redundancy process, the employer may ask volunteers for furloughing or identify those sectors most affected and apply usual redundancy style measures. 
• Employees who undertake other employment during their contracted hours with the original employer may lose eligibility to CJRS. 

You may also wish to consider

• If you have not yet paid your March PAYE payment, then you should consider not doing so and instead seek a Time to Pay (TTP) arrangement.  
• If your business still needs short term cash flow support, you may be eligible for a Coronavrus Business Interruption Loan. 

We expect more information to be released in the coming weeks. We will communicate further details as we have them.